Curly Told Larry About His New Business Venture: Curly Pays

question 9

Multiple Choice

Curly told Larry about his new business venture: Curly pays Acme International $1,000 per month for supplies and access to Acme's network,works out of his own apartment on his own computer and earns monthly revenues of $1,500.Should Larry quit his job and do what Curly is doing?

• A)Yes,if Larry has at least $1,000 in savings to get started.
• B)Not if Larry is earning more than $500 per month at his current job.
• C)Yes,if Larry can borrow the $1,000 monthly payment for less than 3% interest.
• D)Yes,if Larry already owns a computer.

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Definitions:

Undercapitalization

The lack of funds to operate a business normally.

Small-Business Failure

A situation where a small-sized business is unable to continue operation due to financial, managerial, or market-related problems.